The world of investment can be fraught with risks, especially when it comes to navigating the waters of real estate investment trusts (REITs) and the brokers who promote them. One case that has raised eyebrows in the investment community is that of Michael Pellegrino and Anthony Pellegrino, who have been linked to Goldstone Financial Group, LLC.
Pellegrino’s history raises several red flags for those considering working with him. Having been registered with multiple firms and accumulating a troubling record of customer complaints—totaling 11 disputes between 2015 and 2019—it’s essential to understand the implications of these allegations. From breaches of fiduciary duty to unsuitable investment recommendations, Pellegrino has faced significant scrutiny for his practices.
The Pellegrino’s Case
The Securities and Exchange Commission (SEC) took significant action barring Michael Pellegrino and his firm from the financial industry. Pellegrino, along with his firm Goldstone Financial Group—based in the suburbs of Chicago and managing $298.5 million in assets—was implicated in a substantial investment fraud concerning 1 Global Capital, which raised $37 million between May 2017 and June 2018.
According to allegations from the SEC, Pellegrino and his partner Anthony Pellegrino reaped nearly $1.6 million in fees from 1 Global for selling its securities, charging fees far exceeding the typical 1% rate for registered investment advisers. Despite attempts to reach him, Michael Pellegrino did not respond to requests for comment and currently faces six unresolved customer disputes.
In a settlement with the SEC—without admitting or denying the findings—both Pellegrinos and their firm were fined $70,000 and required to enlist an independent compliance consultant. The SEC’s investigation stemmed from claims surrounding a larger $283 million loan fraud perpetrated by 1 Global Capital, which marketed merchant cash advances as secure, high-return investments.
Rather than providing legitimate financing, the company misallocated investor funds to support the lavish lifestyle of its CEO, Carl Ruderman, and other unrelated ventures. The tide turned for 1 Global when it filed for bankruptcy in July 2018, ultimately resulting in enormous losses for investors.
In the wake of the collapse, Goldstone Financial Group took remedial actions, helping to settle claims with 1 Global investors by returning not only referral fees but also an additional $700,000.
Notably, Anthony Pellegrino stepped up by contributing approximately $1.3 million from his personal funds to support this resolution while the firm also appointed a new chief compliance officer to oversee future compliance efforts.
